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Stocks to watch for Friday, January 5

Apollo Investment (AINV) said it plans to make a public offering of 16 million shares of its common stock. The New York-based company expects to use the net proceeds of the offering to pay down debt, to fund investments in portfolio companies and for general corporate purposes.

Arrow International (ARRO) reported fiscal first-quarter net earnings of $14.5 million, or 32 cents a share, up from $11.8 million, or 26 cents a share, in the year-ago period. Revenue rose to $122.9 million from $113.6 million. Analysts polled by Thomson First Call had expected the Reading, Pa.-based medical supply company to post a per-share profit of 34 cents on revenue of $125 million. For the fiscal 2007, the company is still targeting earnings in the range of $1.40 to $1.48 a share on revenue of $515 million to $525 million.

Axa SA (AXA) said it has agreed to sell Winterthur's U.S. property and casualty business to Australia's QBE Insurance Group for $1.8 billion, a culmination of a strategic review of the unit that the French insurer began in June.

BJ's Wholesale Club (BJS) slashed its fiscal fourth-quarter earnings forecast and announced it will close its two ProFoods Restaurant Supply locations and 46 in-club pharmacies.

Denny's (DENN) said that December sales at stores open at least one year rose 1%. The Spartanburg, S.C.-based restaurant chain also said that the guest check average rose 2.2% during the five-week period ended Dec. 27, while guest counts fell 1.2

Dollar Tree Stores (DLTR) said that its fourth-quarter sales are trending towards the upper end of its previous forecast of $1.28 billion to $1.31 billion.

Electro Scientific Industries (ESIO) reported second-quarter net earnings of $3.79 million, or 13 cents a share, compared with $3.19 million, or 11 cents a share, during the year-ago period. The Portland, Ore.-based provider of manufacturing systems to the electronics market posted revenue of $59.3 million vs. $48.6 million. Analysts polled by Thomson First Call had forecast second-quarter earnings of 16 cents a share on revenue of $59 million. Additionally, the company said it expects third-quarter shipments and revenue of $55 million to $65 million, and a gross margin increase of 2 to 3 percentage points from the second quarter.

FormFactor (FORM) President Joseph Bronson has decided to leave the company, effective Friday, to pursue other interests. Bronson also resigned from the board, the Livermore, Calif.-based semiconductor component maker said.

Moody's Investors Service placed the long-term ratings of Gap (GPS) on review for possible downgrade following the retailer's downward revision of full-year earnings and its holiday sales announcement.

Genentech (DNA) reported "encouraging" results from a Phase II study comparing pertuzumab plus gemcitabine to gemcitabine alone in women with platinum-resistant ovarian, primary peritoneal, or fallopian tube cancer. The study enrolled and treated 130 women, and no new or unexpected safety signals were observed, Genentech said. Data from the study will be submitted for presentation at an upcoming medical meeting, the South San Francisco, Calif.-based biotech company said.

Healthways (HWAY) said that first-quarter net income nearly doubled to $11.8 million, or 32 cents a share, up from the $6.46 million, or 18 cents a share, posted a year ago. Sales were $117.1 million vs. the $90.6 million for fiscal 2006's first quarter. While earnings were in line with forecasts from analysts polled by Thomson First Call, sales fell short of targets by nearly $4 million. The company reaffirmed its forecast of earnings of $1.44 to $1.61 a share for fiscal 2007 on sales of $667 million to $701 million, both in line with First Call estimates. The company said it expects to earn 29 cents to 30 cents a share in the second quarter, while the First Call estimate is for 34 cents. Shares ended the day down 26 cents to $45.74.

Herbalife (HLF) forecast fourth-quarter 2006 sales of $482.7 million to $484.7 million, and said it still sees earnings in the range of 52 cents to 55 cents a share, excluding expenses associated with its realignment. For full-year 2007, the company reaffirmed its earnings forecast of $2.40 to $2.47 a share, excluding items. For the first-quarter of 2007, the Los Angeles-based herbal supplement maker forecast earnings of 50 cents to 55 cents a share on sales growth of 6% to 10%.

Laidlaw International (LI) posted a first-quarter profit of $40.1 million, or 50 cents a share, down from $58.3 million, or 58 cents a share, from a year ago, due to lower passenger traffic as a result of price increases. Revenue at the bus operator rose to $858.1 million from $846.8 million, with Greyhound sales falling $25 million from a year earlier. Analysts polled by Thomson First Call had expected a profit of 57 cents a share on sales of $866.3 million.

Longs Drug Stores (LDG) said preliminary revenue for December was $567.3 million, up 7.2% from $529.4 million during the year-ago period. The Walnut Creek, Calif.-based company said preliminary total retail drug store sales for the month were $539.5 million, up 2.7% from $525.5 million a year ago. Retail drug store same-store sales rose 1% from the prior year, while pharmacy same-store sales increased 2.3%, and front-end same-store sales increased 0.1%, the company said

Micrel (MCRL) cut its outlook for its fiscal fourth quarter ended Dec. 31. Micrel now expects fourth-quarter earnings of 9 cents to 10 cents a share on revenue of $64 million to $65 million. The San Jose, Calif.-based chipmaker had previously forecast earnings of 11 cents to 13 cents a share on revenue of $67 million to $70.5 million. The company said the revenue shortfall is primarily a result of weakness in demand during the last two weeks of December across its end markets. Micrel added that it expects first quarter 2007 revenue to increase sequentially from the fourth quarter of 2006.

Millennium Pharmaceuticals (MLNM) said it expects a 2007 net loss in the range of $60 million to $90 million. On a pro forma basis, the Cambridge, Mass.-based company said it sees earnings of $10 million to $20 million for the year. Millennium also said it sees net product sales of Velcade in the United States of $240 million to $260 million in 2007, and royalties in the range of $140 million to $150 million for the year.

Motorola (MOT) lowered its earnings and sales guidance for the fourth quarter, citing an unfavorable geographical and product mix of mobile-phone sales that hurt margins and average selling prices.

Openwave Systems (OPWV) said it expects a second-quarter per-share loss of 24 cents, or a loss of 8 cents to 9 cents on a pro forma basis, on revenue of $83 million to $84 million. The pro forma loss outlook excludes stock-based compensation expense of 8 cents a share, amortization of acquisition-related costs of 6 cents a share, and restructuring and other expenses of 2 cents a share. The Redwood City, Calif.-based software company also said it has authorized a $100 million share buyback program, scheduled to begin later this month. Additionally, Openwave said it expects third-quarter pro forma earnings to be breakeven on a per-share basis, on revenue of $85 million to $90 million. For the fourth quarter, the company said it expects pro forma earnings to increase slightly from the prior quarter on revenue of revenue of $90 million to $95 million.

Redback Networks (RBAK) forecast lower-than-expected revenue of roughly $64 million for fourth-quarter ended Dec. 31. "Unfortunately we failed to meet our revenue targets due to, among other reasons, distribution channel disruptions caused by the timing of our proposed acquisition by Ericsson, and lower-than-expected revenue from our older SMS product line as we transitioned our largest SMS customers in the fourth quarter to our SmartEdge products," said Kevin DeNuccio, president and chief executive, in a statement. "We expect that substantially all of the delayed purchases will become revenue in 2007."

RightNow Technologies (RNOW) said it expects fourth-quarter results to come in below its previous outlook. The Bozeman, Mont.-based company had previously forecast results in a range of a net loss of 2 cents a share to breakeven. RightNow also said it expects fourth-quarter revenue of $28 million.

Saba Software (SABA) reported a second-quarter net loss of $1.01 million, or 4 cents a share. During the same period a year ago, the Redwood Shores, Calif.-based company posted net earnings of $131,000, or a penny a share. Pro forma earnings were $2 million, or 7 cents a share, compared with $694,000, or 4 cents a share, a year ago. Saba reported revenue of $26.2 million vs. $16.2 million. Analysts polled by Thomson First Call had forecast second-quarter earnings of 6 cents a share on revenue of $25 million. Additionally, Saba said it expects third-quarter per-share results to range from breakeven to a profit of 3 cents on revenue of $26.5 million to $27.5 million. On a pro forma basis, the company said it sees earnings of 7 cents to 10 cents a share for the quarter.

Syms (SYM) reported third-quarter net earnings of $2 million, or 14 cents per basic share, compared with $1.18 million, or 8 cents per basic share, during the same period a year ago. The Secaucus, N.J.-based retailer posted revenue of $72.8 million vs. $74.7 million. Same-store sales fell 1.5% during the quarter, the company said.

UAP Holding (UAPH) reported a fiscal third-quarter net loss of $13.2 million, or 26 cents a share, compared with a net loss of $9.35 million, or 19 cents a share, in the year-ago period. Revenue at the Greely, Colo.-based distributor of agricultural and non-crop inputs rose 16% to $375.7 million from $323.1 million. UAP revised its fiscal 2007 earnings forecast to a range of $1.15 to $1.25 a share, excluding charges related to the refinancing of debt.

Xyratex (XRTX) reported fourth-quarter net earnings of $9.35 million, or 32 cents a share, down 32% from $13.8 million, or 48 cents a share, during the same period a year ago. Earnings from continuing operations were $10.9 million, or 36 cents a share. The U.K. maker of data storage equipment posted revenue of $241.1 million vs. $203.6 million. Analysts polled by Thomson First Call had forecast fourth-quarter earnings of 30 cents a share on revenue of $225 million. The gross profit margin was 17.4%, compared with 21.7% a year ago. Additionally, Xyratex said it expects first-quarter per-share earnings of 16 cents to 26 cents, or 23 cents to 33 cents on a pro forma basis, on revenue of $220 million to $235 million.

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